Years ago, Toan incorporated ABC Ltd. He paid $50000 for its shares and lent it $150,000. He elected himself and two family members to the Board of Directors, which in turn elected him as President and approved a ten-year lease for a store his family owns. He managed the store and was paid 10% of ABC's gross revenues as compensation. Subsequently, Binh bought 20% of ABC's common shares.

ABC's board approved a contract to buy 30% of the inventory of XYZ Co., a company owned by Toan. Subsequently, Toan began taking home some of ABC's inventory without paying for it. ABC had net profits in many years and made some losses in others. It had not paid dividends in many years. When Binh complained that she did not receive dividends in many years, the Board of Directors expressed that while ABC could be paying dividends, it decided not to do so to retain ABC's profits for expanding its business portfolio. When Binh inquired about the business expansion and undistributed earnings of ABC, and in response to her inquiry, the Board of Directors refused to disclose the amounts of their salaries, compensations, and any information about business projects.

It was later revealed that in some years, ABC's board met once a year; in others, it never met. Recently, ABC ceased its business. Its assets were limited to $15,000 in cash. Among the claims against ABC was one by Thanh who was the supplier and was owed $20,000 for computer equipment. Another claim was Toan's (the President), for the $150,000 that he had lent and had just become due.

Thanh and Binh, individually (separately), filed lawsuits against ABC and Toan.

REQUIRED:

Advise Thanh, if he can reasonably seek to recover against Toan the outstanding amount owed by ABC? Discuss by applying relevant case law and Australian legislation.

Does Binh have a cause of action against Toan, either derivatively or personally? Discuss by applying relevant case law and Australian legislation.